U.S. tariff order on Maine-linked Canadian paper makers under federal review

The Commerce Department is reviewing a December order that imposed tariffs on two Canadian paper companies with substantial operations in Maine.

The department will revisit the 18.85 percent countervailing duties on supercalendered paper – the glossy, coated paper used in magazines and other products – produced in Canada by Irving Pulp and Paper and Catalyst Paper. Tariffs were imposed on both after the Commerce Department ruled that Canadian supercalendered paper producers were given unfair subsidies by the Canadian government.

However, the tariffs on Irving and Catalyst were based on an investigation into the government help provided to another company, Port Hawkesbury Paper. U.S. Sens. Angus King and Susan Collins of Maine, who welcomed the duties of more than 20 percent imposed on Port Hawkesbury Paper, said the duties on Irving and Catalyst paper were “arbitrary and unfair” because the Commerce Department had not conducted a separate investigation into whether those two companies were subsidized by the Canadian government.

The tariff order, issued in December, was hailed as a victory for Verso Paper and Madison Paper, both of which operate mills in Maine and compete in supercalendered paper markets. The duties are intended to raise the price of Canadian paper to offset the subsidies provided to those producers.

But King and Collins said they are concerned that the duties will hurt paper sales by Irving and Catalyst and potentially harm those companies’ operations in Maine. Catalyst owns a paper mill in Rumford that employs about 800 people, and Irving owns and manages 1.2 million acres of Maine woodlands and two sawmills in the state. It also employs more than 400 Mainers at its paper mill in New Brunswick. Irving estimates that its operations support 1,800 direct and indirect jobs in Maine.

“The decision by the Department of Commerce to begin an expedited review of Irving and Catalyst is good news for Maine workers whose jobs could be affected by this unfortunate situation,” King and Collins said in a joint statement issued Tuesday.

An independent review of Catalyst and Irving, they said, would ensure that any tariffs imposed on those companies reflect any actual subsidies they receive.

The Department of Commerce said its expedited review and ruling will be issued by the beginning of September.

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